Hyundai plans to rebrand for China
SEOUL/BEIJING Bruised by anti-Korean sentiment in its biggest market and losing ground to local automakers, Hyundai Motor will open its first Chinese brand store.
It may also locally assemble its premium Genesis cars and accelerate the launch of a sport utility vehicle (SUV), people familiar with the plans said.
The measures are aimed at rebooting the South Korean firm's branding in China, where many see Hyundai as a lower-end maker of city taxis.
Hyundai and its affiliate Kia Motors were not long ago ranked third among foreign car brands in China, but recent sales have been hit by consumer backlash over South Korea's deployment of a US anti-missile defence system which Beijing opposes.
Analysts say the diplomatic row masks broader problems for Hyundai/Kia in China: poor brand recognition and a model line-up struggling against local brands' cheaper SUVs.
"Hyundai has an in-between brand that doesn't have a clear identity in China, and there is the backdrop of poor China-Korea relations," said Mr James Chao, Shanghai-based Asia-Pacific chief of consulting firm IHS Markit Automotive.
"Newly introduced SUVs should help, but they are late to the game."
Even before the missile system row, Hyundai/Kia's China market share tumbled to 8.1 per cent last year, the lowest in eight years. This year, it has slid further to 5 per cent.
To help its identity crisis, Hyundai will in September open a brand experience centre in Beijing's 798 Art District, a trendy hub of refurbished factory buildings. Hyundai has three similar centres in Seoul and one in Moscow.
Hyundai is also considering using complete knock-down kits shipped from South Korea to assemble Genesis cars in China - more than halving import tariffs to 10 per cent.
It has not decided which Genesis model it will build in China first but plans to have six models, including a sports sedan and two SUVs, under the premium marque by 2020.
"While the Genesis brand is reviewing a variety of strategies for the China market, no specific decisions have been made yet," Hyundai said.
Hyundai sold only 74 Genesis sedans in China last year, down from 1,016 in 2015.
It sold a single Equus, down from 10 the previous year, according to export data.